Coal consumers express concern on coking coal price hike

Coal consumers on Saturday said hike in coking coal prices by Coal India's subsidiaries could lead to an increase of power generating cost by Rs 0.40 per unit and would hurt the steel industry, which is facing subdued demand.

Bharat Coking Coal Limited (BCCL) increased its coking coal prices by about 20 per cent from Friday while Central Coalfields Ltd (CCL) raised its prices from Saturday midnight.

Coal consumers said price hike would compel power utilities along with steel and related industries buying coal from BCCL and CCL to import fossil fuel.

"Hike in BCCL price is directly linked to power utilities as well as steel industries... The overall impact on power cost may be in the tune of 40 paisa per unit," said Coal Consumers' Association of India's Secretary General Subhasri Chaudhuri.

She said increase in CCL coal price is linked to steel and related industries.

"In the history of CIL, for the first time, a particular quality has been linked to import parity price and it has been increased by 99 per cent at one go from Rs 5,780 to Rs 11,500," Chaudhuri said.

Overall impact is huge on power houses buying coal from BCCL as well as steel industry which is reeling under dampening demand, she said, adding that this hike would discourage fair competition and buying coal from BCCL may not be viable for power utilities as per unit cost would be much more than others.

"It had never been the choice of power utilities to source coal with caking properties. Instead, they had to pay washery recovery charges throughout for high ash NLW (non-linked washery) coal without getting advantage of beneficiation. Now adding to the woe, they would pay much higher than thermal coal prices if sourced from BCCL," coal consumers said in a statement.

on one hand the government is discouraging import of coal and Coal India is providing import substitute from domestic sources while on the other hand, power utilities along with steel and related industries buying coal from BCCL and CCL are being compelled to source coal from imported options, it added.

--IANS

bdc/lok/vm